Forget about Big Brother, now it's Big Brethren Watching

The following are extracts from an article written by David Yaffe-Bellany as quoted on the NZ Herald website.

Over the last seven months, McDonald's has spent hundreds of millions of dollars to acquire technology companies that specialise in artificial intelligence and machine learning. And the fast-food chain has even established a new tech hub in the heart of Silicon Valley — the McD Tech Labs — where a team of engineers and data scientists is working on voice-recognition software.

The goal? To turn McDonald's, a chain better known for supersized portions than for supercomputers, into a saltier, greasier version of Amazon.

In the coming years, the company's machine learning technology could change how consumers decide what to eat — and, in a potentially ominous development for their waistlines, make them eat more.

At some drive-thrus, McDonald's has tested technology that can recognise license-plate numbers, allowing the company to tailor a list of suggested purchases to a customer's previous orders, as long as the person agrees to sign away the data.

As the evolution of the McDonald's drive-thru shows, the internet shopping experience, with its recommendation algorithms and personalisation, is increasingly shaping the world of brick-and-mortar retail, as restaurants, clothing stores, supermarkets and other businesses use new technology to collect consumer data and then deploy that information to encourage more spending.

At some stores, Bluetooth devices now track shoppers' movements, allowing companies to send texts and emails recommending products that customers lingered over but did not buy. And a number of retailers are experimenting with facial-recognition tools and other technologies — sometimes known as "offline cookies" — that allow businesses to gather information about customers even when they are away from their computers.

In March, McDonald's spent more than US$300 million ($468.6m) to buy Dynamic Yield, the Tel Aviv-based company that developed the artificial intelligence tools now used at thousands of McDonald's drive-thrus.

The deal "has changed the way the high-tech industry thinks about potential M&A," said Liad Agmon, a former Israeli intelligence official who co-founded Dynamic Yield. "We'll see more nontraditional tech companies buying tech companies as an accelerator for their digital efforts. It was genius on McDonald's side."

When Agmon, the co-founder of Dynamic Yield, announced the McDonald's acquisition in a company WhatsApp chat in March, his colleagues thought he was joking. "When you start working for a tech company," Agmon said, "you don't expect this."

Soon, however, the news began to sink in:

The next day, 250 McDonald's hamburgers arrived at Dynamic Yield's headquarters in Tel Aviv, along with fries for the whole staff.

But this wasn't really a McDonald's crowd. By the time the staff finished hugging and congratulating each other, the burgers were cold.